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  • Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

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« August 2009 | Main | October 2009 »

September 29, 2009

LOLR Exception, LOL?

I got several comments and questions following yesterday's post on capital requirements and WTO obligations. One commenter asked about whether Federal Reserve actions are carved out of the GATS, and another pointed out that the WTO has put out a 1998 document further classifying regulatory measures into a taxonomy by GATS applicability. Both questions highlight the uncertainty surrounding overly intrusive WTO/ GATS obligations.

Continue reading "LOLR Exception, LOL?" »

September 28, 2009

G-20 Summit: Yes, Actually Dangerous

Yep, the G-20 did it a third time: they called for reregulation and deregulation simultaneously. Here's the leaders' statement from the Pittsburgh meeting last week:

We will keep markets open and free and reaffirm the commitments made in Washington and London: to refrain from raising barriers or imposing new barriers to investment or to trade in goods and services, imposing new export restrictions or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports and commit to rectify such measures as they arise. We will minimize any negative impact on trade and investment of our domestic policy actions, including fiscal policy and action to support the financial sector. We will not retreat into financial protectionism, particularly measures that constrain worldwide capital flows, especially to developing countries...

We remain committed to further trade liberalization. We are determined to seek an ambitious and balanced conclusion to the Doha Development Round in 2010...

As my colleague Lori Wallach noted after this was released:

The G-20 leaders have announced a very perplexing plan of action that calls for reregulation of the financial sector to try to avoid the next economic crisis while simultaneously calling for completion of the WTO Doha Round, which would require additional financial deregulation, including new WTO limits on accounting standards through a text the disgraced Arthur Andersen firm had a hand in formulating.

Perversely, the Europeans at the G-20 have been the strongest proponents of a new global floor of financial regulation while simultaneously being the strongest proponents pushing for a G-20 agreement on a new deadline for completion of the WTO Doha Round, which European negotiators have packed with new financial deregulation requirements. The G-20 leaders cannot have it both ways: They cannot follow through on desperately needed reregulation of the financial sector while also pushing for completion of the WTO Doha Round, which requires additional financial deregulation.

Over at the Baseline Scenario, Simon Johnson asks a good question: "Was The G20 Summit Actually Dangerous?"

consider for a moment the key way in which the G20 summit has worsened our predicament.

There is broad agreement that capital requirements need to be increased and a growing consensus that very large banks in particular should be required to hold bigger equity cushions.  This is a pressing national priority – if our financial system is to become safer – and reasonable people are starting to put numbers on the table, ever so quietly: Joe Nocera is hearing 8%, but Lehman had 11.6% tier one capital on the day before it failed and the US banking system used to carry much more capital – back in the days when it really was bailout free (think 20-30% in modern equivalent terms (see slide 40 here).

Obviously, raising capital standards in the US is going to be a long and drawn out fight.  The G20 could help, if it set high international expectations, but the opposite is more likely.  As Nocera suggests this morning, the inclination of the Europeans – largely because of their funky “hybrid” capital, but also because they have some very weak banks – will be to drag their feet.

Why should we care?  This administration seems to think that we need to bring others with us, if we are to strengthen capital requirements.  Our progress will be slowed by this thinking, the glacial nature of international economic diplomacy, and the self-interest of the Europeans.

Instead, the US should use its power as the leading potential place for productive investments to make this point: If you want to play in the US market, you need a lot of capital.  If you would rather move your reckless high risk activities overseas, that is fine.

I couldn't agree more, and while we're at it, let's break up all the big banks, and divide up their investment from their commercial arms.

But I think Simon errs in his passing comment that "this process needs to be WTO-compliant." The solution is to walk and chew gum at the same time: reform the banking sector AND reform the WTO.

Continue reading "G-20 Summit: Yes, Actually Dangerous" »

September 25, 2009

Lori Wallach at the G20 and on Democracy Now!

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Check out the video above, in which GTW Director Lori Wallach discusses how the WTO's Financial Services Agreement undermines the stated G-20 goal of reregulating the financial sector.

Updates from the ground in Pittsburgh are plentiful, for instance a New York Times story with this quote:

Trevor Griffith, 21, was part of the march after driving 16 hours from Pensacola, Fla., with three fellow students from the University of West Florida.

“The fact that 20 or so individuals right now are determining economic trade policies for four to five billion people just isn’t right,” Mr. Griffith said. “That’s why we’re here.”

Also check out some photo galleries at the Post and the Times, or, for something a little more Web 2.0 and less dinosaur media, this monster discussion forum thread.

Finally, for more from us, check out our new report that Todd just posted about, and the action alert we sent on Wednesday asking folks to call on Obama to turn around the WTO.

September 23, 2009

New Report: G-20 Must Commit to WTO Reform to Build Financial Stability

This week, President Obama is meeting with other leaders for the G-20 Summit in Pittsburgh, a city ravaged by trade-related job loss.

Global justice advocates are also meeting up there to "push for more vigorous regulation of financial and credit markets, more stringent environmental standards and stronger commitments to human rights and the rights of workers to organize," according to the Steelworkers (whose home base is the 'Burgh). And John Sellers of the Ruckus Society told the New York Times that "crowds of demonstrators on Thursday and Friday would be significantly larger than the nearly nonexistent crowds that showed up for the last G-20 meeting in the United States, in Washington last November."

To help kick off the welcome party, we've released a new report that looks at the WTO's financial deregulation requirements. In particular, we examine a WTO provision on financial stability measures, and find that - contrary to the claim of some of the WTO's defenders - it doesn't offer a safe harbor for prudential tools.

That's the bad news. The good news is that the report makes a series of policy recommendations to fix this conflict. Some of them are surprisingly simple, and could be accomplished with a healthy dose of political will. Oh, and a bit more grounding in reality than the last two G-20 summits, which have called for reregulation on the one hand, and WTO-led deregulation on the other.

The public is echoing this call for financial and WTO reform. As we reported last week,

Over 50 organizations representing over eight million Americans released a letter today that they sent to President Obama urging him to "advocate a global regulatory floor, and oppose any efforts to impose a ceiling" on re-regulation in the upcoming G-20 Summit.

And the AFL-CIO has adopted a resolution, which says,

We should not adopt or negotiate new trade agreements until we review the record of existing trade agreements and build a comprehensive new trade policy that will support the creation of good jobs at home. The TRADE Act, introduced by Rep. Mike Michaud with more than 100 co-sponsors in the House, and soon to be introduced in the Senate by Sen. Sherrod Brown, lays out such a review and reform. Reform must apply both to bilateral agreements and to new talks at the World Trade Organization. We should use the strategic pause to review the performance of past trade agreements and recommend renegotiation where needed... WTO rules must accommodate trade-related measures to coordinate responses to global environmental challenges."

Now, you too can make your voice heard, in this petition to President Obama. Here's the pitch from my colleague Bill Holland:

Petition to President Obama: Turn Around the WTO!

World leaders at this week's G20 Summit will issue plans for reregulating the financial industry to help solve the economic crisis. Yet, bizarrely those same leaders will push for completion of the current WTO negotiations - called the Doha Round - which at its core calls for further financial services deregulation and pressures governments to limit their regulation of banks.

We need to stop this.

President Obama needs to hear from you that he must lead the renegotiation of existing WTO rules – like he said he would on the campaign trail. And, he must pull the plug on the lunatic idea of the WTO Doha Round requiring further financial service deregulation - which would only exacerbate the economic crisis. Sign our petition to the president telling him to turn around the WTO.

Obama Administration Considers Cutting Lobbyists from Trade Policy Panels

The word on K Street is that the Obama administration is considering cutting lobbyists from federal advisory panels, including trade-related panels. Some of the committees must be re-chartered next February and sources close to the situation say that the administration is likely to either tell agencies to ban lobbyists from the panels or to provide the agencies influential guidance suggesting they avoid having lobbyists serve on the committees. The catalyst for this change is supposedly Norm Eisen, special counsel to the president for ethics and government reform, also known as the White House “ethics czar.”

As expected, this is causing some tremors on K Street, and Roll Call reports that some lobbyists are “aghast at the move.” This is unsurprising, considering the extent to which industry has lobbied to monopolize these panels. If the Obama administration follows through on this move, it could be an important step in reforming U.S. trade policy to reflect more than just corporate interests. 

September 22, 2009

UN: Colombia Abuses Continue, Now Against Human Rights Defenders

Its no surprise to us here, but in case you needed yet another reminder that mainstream institutions like the United Nations are confirming that Human Rights atrocities are ongoing in Colombia, you get one here today.

Here's Margaret Sekaggya appearing on Democracy Now (go to 9:30 min):

Sekaggya builds on the proclamations made in June by her colleague Phillip Alston. As quoted by Reuters Times, Alston condemned the Colombian military's pattern of slaughtering of innocent civilians, then later dressing them up to look like enemy combatants (known as extrajudicial executions or false positives).  He called it "cold-blooded, premeditated murder of innocent civilians for profit."

So when the Uribe government, itself linked to paramilitary death squads, send dozens of hearts sculptures to DC to whitewash these facts about Colombia, is THIS what they're trying to cover up, the expanding harassment, persecution and violence against Human Rights defenders? Maybe its the fact that violence against unionists persists with at least 29 unionists assassinated to date in 2009? Or maybe the murders and displacement of thousands of Indigenous- and Afro- Colombians each year?

Regardless, Uribe and his corporate backed death squad buddies seem to think that if they sweep enough truth under enough rugs, they can con Congress into enacting more NAFTA-type trade policies. With over 120 House members demanding reform via the TRADE Act, the Colombian Embassy should consider buying stock in broom companies.

Or, they could take actual measures to end violence and impunity, and renegotiate the FTA to ensure it does no further harm to the very populations they've been repressing and exploiting all these years. Now, that would be change we can believe in!

September 21, 2009

Flash Trading Ban a WTO Concern?

By Todd Tucker and Mohammad Khan (ed note: Khan was our star intern this summer, helping bring us up to speed with his considerable knowledge of financial markets. We thank him for helping co-write this blog post.)

Note: This post assumes some level of understanding of high frequency trading (HFT); a comprehensive introduction can be found on pages 8-14 of The New Bull Market Fallacy. This post examines the compounding difficulties in the regulation of HFT.

Last week, the Securities and Exchange Commission (SEC) attracted headlines when its commissioners unanimously voted to propose a ban on the controversial use of flash trading.

Yet, what is this practice, and what are its implications under international pacts like the World Trade Organization (WTO)?

Some brief background into the development of HFT is useful at this point. Accusations of espionage and intellectual property theft have recently become common in the HFT community, as individuals move from one HFT institution to another in an attempt to replicate their successes for more compensation. Goldman has been embroiled in a recent scandal regarding its “trading huddles” stemming from a WSJ article that accused Goldman of exclusively tipping off its major clients with internal recommendations unavailable to other Goldman clients.

 Analogous to credit rating agencies in the current crisis, market exchanges are vulnerable to conflicts of interest. Not adopting dangerous programs like flash trading results in a loss of market share; and although adopting flash trading programs magnifies risk and presents many new problems, exchanges have been forced to enter the HFT realm. HFT, flash orders in particular, have spawned a race to the bottom for exchanges. In an effort to maintain market share, exchanges have been forced to employ tactics like flash trading that they fully admit are not beneficial to market participants, but simply cannot afford to pass up. Take these statements from exchanges about flash orders: NASDAQ, BATS and NYSE.

Not all exchanges are similarly repentant. Direct Edge is the lone market center that has unrepentantly (and almost single-handedly) forced flash trading down the throats of other exchanges and continues to defend this position. Unsurprisingly, it has gained considerable market share since employing its Enhanced Liquidity Provider flash trading program.

To complicate matters a bit more, a recent WSJ article notes that Direct Edge is “owned 31.5% by the German-Swiss owned International Securities Exchange.”

While these conflicting interests certainly complicate the regulation of HFT, any new restrictions face yet more limitations in the form of international agreements like the World Trade Organization’s (WTO) provisions on financial services.

Continue reading "Flash Trading Ban a WTO Concern?" »

September 18, 2009

Trade a Flash Point Issue in Pennsylvania’s Democratic Primary

As Rep. Joe Sestak (D-Pa.) is set to challenge Sen. Arlen Specter (D-Pa.) for his U.S. Senate seat in the upcoming Democratic primary, trade policy has surfaced as a point of contention between the two candidates. Both have criticized the other as being supportive of unfair trade agreements and Specter agreed with the accusation that Sestak is “weak on trade.”

The candidates have a mixed vote record on trade. Specter voted for both NAFTA and the WTO, but has made occasional fair trade votes in recent years, by voting against China PNTR and CAFTA. On the Senate floor in 2005, Specter said of CAFTA,

“This trade agreement would adversely affect this job loss in the United States… many U.S. corporations would have to shut down their operations, export their jobs, and leave skilled workers jobless. This agreement would aggravate the problem. In addition to job loss, this agreement fails to enhance workers' rights…Ultimately, CAFTA would create downward pressure on wages because it would force our American workers to compete with Central American workers who are working for lower wages. This would allow foreign based companies to expand while leaving America more dependent on imports from abroad, which in turn would lessen the demand for domestic production and create even greater economic instability.”

Sestak for his part voted to deny fast-track treatment to the FTA with Colombia and has said that he plans to vote against the Korea and Colombia FTAs.

Yet, both candidates voted for the Peru FTA in 2007 and at this point, neither has cosponsored the TRADE Act – a key demand of fair traders.

The fact that the two candidates are analyzing each other’s trade policies and referring to specific trade agreements shows that political candidates are becoming more educated about trade policy and are using the issue as a platform for (re)election. In other words, trade continues to be a major election issue.

CAFTA Signatory Honduras Falls Victim to a Coup

Recently ousted Honduran President Manuel Zelaya was in Washington, DC earlier this month and met with Secretary of State Hillary Clinton. Zelaya was roused from bed at gunpoint by the Honduran military, forced on a plane, and flown to Costa Rica in June. Since then, the de facto government has violated civil liberties left and right: The Huffington Post reports that Zelaya supporters have been killed, hundreds of people have been assaulted by armed forces, and over a thousand have been illegally detained. Meanwhile, press and media outlets have been shut down and journalists have been arrested and detained. 

Zelaya was criticized by Honduran elites for his progressive policies: During his tenure, Zelaya’s administration raised the minimum wage, gave out free school lunches, provided pensions for the elderly, distributed energy-saving light bulbs, decreased the price of public transportation, expanded scholarships for students, and passed legislation to protect the environment. He enjoys broad popular support, especially from unions, human rights groups, indigenous groups and peasant associations. 

The situation in Honduras has a number of important implications: Fair traders have long argued that NAFTA-style deals promote instability and now Honduras, a signatory to CAFTA, has suffered Central America’s first coup since the Cold War. CAFTA was approved in Honduras by local elites, the same interests who are threatened by Zelaya’s progressive policies. The instability in Honduras is an illustration of how NAFTA-style trade agreements can undermine democratic governance in member nations.

September 15, 2009

Americans for Financial Reform Urges World Leaders to Change Course on Global Financial Deregulation

Over 50 organizations representing over eight million Americans released a letter today that they sent to President Obama urging him to "advocate a global regulatory floor, and oppose any efforts to impose a ceiling" on re-regulation in the upcoming G-20 Summit.

The event will bring the heads of the 20 leading economies to Pittsburgh, Pennsylvania from September 24-25, and "will be the next critical test of whether the United States can inspire the governments of the other major economies to join together to begin the vital work of creating a global economy that delivers a future of widely shared economic prosperity and security at home and abroad," said the labor, consumer and faith groups, which include Americans for Financial Reform – the coalition of 200 groups that is leading the efforts to reform and restore oversight, accountability, and transparency to the nation’s financial system.

The letter calls on President Obama and the G-20 to establish "a global regulatory floor for hedge funds, private equity funds, derivatives and off balance sheet activity."

The groups also urged the president "to lead an effort to ensure international agencies are pursuing policies that support global economic recovery." The letter notes that the International Monetary Fund (IMF) and World Trade Organization (WTO) impose deregulatory requirements that impede nations’ ability to resolve problems like "too big to fail" financial service providers and destabilizing capital flight.

Continue reading "Americans for Financial Reform Urges World Leaders to Change Course on Global Financial Deregulation" »

September 14, 2009

California Legislature Wants a New Way Forward

The California legislature spoke loudly for fair trade last week. The Senate voted 23-13 and the Assembly 50-29 to rethink the state’s future trade pact commitments by passing AB 1276, a new trade oversight law.

California, perhaps more than any other state, understands that NAFTA-style trade agreements are certainly about more than simply trading goods and services. Unfortunately, Californians have learned this after spending way too many tax dollars warding off corporate claims, totaling nearly $1 billion, New way forward against NAFTA challenges of state environmental and public interest regulations including a state ban on gasoline additive MTBE and mining regulations. Under NAFTA, foreign investors are given special rights, among which is the ability to sue governments in a private NAFTA tribunal if the corporation feels that a new regulation/policy affects their bottom line. Just a few months ago, rumblings surfaced of another possible trade challenge against the state’s new low carbon fuel standards.

Even more troubling is that in the midst of painful economic hardship, vital economic development policies like “Buy-local/Buy California,” could also easily fall prey to trade challenges under various trade pact procurement agreements.

Assembly Member Nancy Skinner, author of AB 1276, is fed up with trade rules that hamstring legislators and explained recently:

It has become increasingly clear that international trade rules do affect state sovereignty. Many common state procurement, investment or other policies could be challenged under the rules of various trade agreements. AB 1276 is a step to ensure that while we are encouraging expanded trade, we are also safeguarding the state legislature’s jurisdiction over decisions with respect to non-trade policies.

AB 1276 recognizes that the state’s decision to commit state procurement, services and investment laws to the terms of trade agreements falls under the jurisdiction of the state legislature. Currently, the federal government consults only with the governor’s office which has exercised full decision-making power over state commitments to trade pacts. AB 1276 brings these decisions out of the back room and into a forum where they can be fully vetted and assessed to determine whether or not new commitments will benefit the state.

If Governor Schwarzenegger signs AB 1276 into law, California will join Maryland, Rhode Island, Hawaii, Minnesota, and Maine in establishing a democratic process for deciding whether or not to commit the state to harmful future trade agreement terms.

September 09, 2009

Protesters Counter Government of Colombia’s PR Campaign

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On Tuesday, Public Citizen’s Global Trade Watch division joined with other organizations to host a successful protest of Colombia’s current PR campaign at Union Station. GTW staff worked with several other public interest groups, including Witness for Peace, TransAfrica Forum, International Labor Rights Forum, the Latin American Working Group, and the Colombia Human Rights Committee. The Teamsters also came out in force.

The backstory here is that the government of Colombia has spent almost a million dollars on a PR campaign in Washington, D.C., supposedly to try to change perceptions about the country and boost tourism. A sprawling, elaborate display has been set up at Union Station, with representatives handing out free flowers and coffee. The location is suspicious – Union Station is where congressional staffers flock every day before and after work, staffers whose bosses may have to vote on the pending Colombia FTA. The campaign’s media work is being coordinated by a former Bush administration trade official, and business representatives connect the effort to the Colombian government’s desire to promote the U.S.-Colombia FTA. The agreement would basically expand NAFTA to the country with the highest level of unionist murders in the world.

We came together with other public interest organizations to illustrate how Colombia has earned the reputation it is trying to reverse, through mass discrimination against indigenous peoples, forced displacement, and ongoing violence against union organizers, workers, and human rights defenders. In order to counter the rosy picture being painted inside, protesters used street theater to show how the proposed Colombia FTA would protect Colombian and American business interests while allowing for continued abuse of Colombia’s workers and indigenous population. Protesters marched outside Union Station for several hours, and constructed a memorial to honor the growing list of victims of violence and impunity in Colombia. The protest disrupted foot traffic going in and out of the station, and garnered coverage from several media outlets, including local ABC, FOX, and NBC channels. Stories were also published in Roll Call and the Washington City Paper.

For more information and to learn how you can help to counter the government of Colombia’s campaign, go to http://www.nomorebrokenhearts.net/. Check out more photos from yesterday's protests after the jump.

Continue reading "Protesters Counter Government of Colombia’s PR Campaign" »

September 08, 2009

Weissman takes helm of Public Citizen

Rob Weissman, a longtime advocate for the public interest, becomes Public Citizen's third president today. You can see our Rob's stand on the issues here, and our press release here. Here's his welcome video:

I am very excited about Rob for several reasons. First, I have known Rob for ten years. When I was a waiter at Cafe Luna, Rob was a great tipper and patient customer - two qualities I weight heavily when considering someone's character. There are many well-known individuals who I served who were neither.

Second, Rob was the one who convinced me to take the job at PC's Global Trade Watch division. He is a real rare creature in Washington in that he shows as much respect to young activists as he does to old pros. There are certainly some meetings I go to where many people don't give you the time of day unless you have been around town for 30 years, and then not always. Rob is decidedly not such a person, and is consistently kind and encouraging - but also tough, challenging students and others to step up and take responsibility.

Third, Rob is a real expert on issues of corporate accountability, and in particular of corporate globalization. Here's what he had to say about pending FTAs:

“Designed by the world’s largest corporations, our global trading system benefits those who designed it. Trading rules, including those in existing and pending free trade agreements, strip power away from democratically elected governments. Trade rules prevent our federal government and our states (as well as other governments) from protecting consumers and the environment. They interfere with efforts to promote community development and the preservation of good-paying jobs. They give pharmaceutical companies the right to price gouge the world’s poor, and help agribusiness eliminate family farms.

“When it comes to trade, we need a redirection. We need trade rules that enhance democracy and ensure that trade advances rather than undermines the things we want from an economy: safe products, good-paying jobs and decent livelihoods, vibrant communities and a healthy planet.

“The Trade Reform, Accountability, Development and Employment (TRADE) Act offers us a way to achieve this redirection. There is overwhelming public support for the course correction that the TRADE Act would achieve; the only question is whether the public can be organized to overcome the entrenched interests supporting the trade status quo.”

September 03, 2009

Fair Traders Sweep Japanese Elections

In last weekend's Japanese elections, Yukio Hatoyama and the Democratic Party were swept to the majority party. Shortly before the elections, Hatoyama wrote this piece, which is well worth a read. Just a taste:

In the post-Cold War period, Japan has been continually buffeted by the winds of marketPrime+Minister+Taro+Aso+Dissolves+Lower+House+tudTAncRKsjl fundamentalism in a U.S.-led movement that is more usually called globalization. In the fundamentalist pursuit of capitalism people are treated not as an end but as a means. Consequently, human dignity is lost.

How can we put an end to unrestrained market fundamentalism and financial capitalism, that are void of morals or moderation, in order to protect the finances and livelihoods of our citizens? That is the issue we are now facing.


A slightly longer version can be found here, which goes into Hatoyama's support for the social-justice concept of subsidiarity, which is often cited by global justice advocates in their arguments against vesting too much power in supranational organizations like the WTO.

University of California Study Finds that CAFTA Intellectual Property Rules Hinder Access to Medicines in Guatemala

A new study from the University of California concludes after rigorous analysis that the Central American Free Trade Agreement (CAFTA) elevates the prices of medicines in Guatemala while removing cheaper, generic options from the market. 

Guatemala is a low-income country with a domestic generic drug industry.  CAFTA’s intellectual property rules affect the drug market not as much through patent protections, but through data protection (or data exclusivity), which inserts an administrative barrier to generic drugs entering the market even if there is no patent in place, providing one company with a monopoly. Not only are generics denied registration and entry into the market by CAFTA’s market protections but generics already in the market are removed. 

The study looked at drugs used to treat some of the most common causes for sickness and mortality in Guatemala, including cancer, pneumonia, diabetes, and cardiac disease and stroke. The intellectual property rules in CAFTA have had a significant effect on medication costs in Guatemala, making many of them prohibitively expensive. In every case included in the study, the data-protected drug was more expensive than its generic equivalent. For example, the insulin Lantus, used to treat diabetes, costs 846 percent more than its generic equivalent. The antifungal Vfend, used to treat infections, costs 810 percent more than the generic medication. 

In fact, CAFTA’s rules on intellectual property provide even stronger monopoly protections than U.S. law or the WTO’s Agreement on Trade-Related Aspects of Intellectual Property (TRIPS).  Unfortunately, Guatemala is a prime example of the effects of CAFTA’s intellectual property rules and the Guatemalan people are paying the price, literally and figuratively. 

For more information, see GTW’s information on CAFTA and access to medicines.

The University of California article, entitled “A Trade Agreement’s Impact on Access to Generic Drugs,” can be found here

September 02, 2009

Pay No Attention to the Man Behind the Curtain

The WTO is proudly touting “WTO Open Day” occurring next week, during which the WTO will open its Geneva headquarters to the public and host activities and guided tours of the building. There will apparently be children’s activities and foods from a variety of member nations. 

This lip service to transparency is ironic considering what we know about how the WTO actually operates: WTO decisions are made by committees and panels that meet behind closed doors with no public disclosure or accountability. The influence of business is apparent, and one WTO staffer admitted to the Financial Times that the WTO “is the place where governments collude in private against their domestic pressure groups” (Guy de Jonquieres, “Network Guerillas,” Financial Times, Apr. 30, 1998). 

Judgments in the WTO’s dispute resolutions tribunals are made by panelists selected for their trade credentials, rather than expertise on public health, environmental protection, or international development. Decisions are made based on documents that are never made public and with testimony from anonymous “experts.” The bias towards industry over public interest concerns is clear: since its creation in 1995 the WTO has ruled over 90 percent of the time that environmental, health, or safety policies before it constitute an illegal trade barrier and must be changed or removed. Furthermore, the WTO acts as a deterrent to the development of important and necessary public interest policies, as many developing countries do not have the money or expertise to defend themselves before the WTO. It is an organization shrouded in secrecy that consistently protects the interests of big business, with wide-ranging and damaging consequences for citizens all over the world – but perhaps the visitors on WTO Open Day will be too distracted by the culinary delicacies to notice. 

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